A Note on Campus Totalitarians

A Note on Campus Totalitarians

03/07/2018Jeffrey Harding

A movement is taking over America’s colleges and universities that rejects classical norms of reason, logic, and scholarship. This anti-intellectual trend is a road to totalitarianism.

What now passes for erudition in many liberal arts departments would not qualify as good scholarship using the proven tests of critical thinking. Worse, dissent is being shouted down, not debated. And many administrators support this trend making it, in effect, de facto campus policy.

This trend has all the hallmarks of societies that have gone totalitarian.

The first wave is always an assault on intellectuals and reason. Whether their shirts were black, brown, or red, academic dissent was shouted down, dissenters were persecuted, and reason was discarded. Many historians have chronicled the similarities of these movements: Friedrich von Hayek’s  Road To Serfdom; William Shirer’s Rise And Fall of the Third Reich; Sean McMeekin’s The Russian Revolution; Ayn Rand’s semi-autobiographical novel about the rise of the Bolsheviks in We The Living.

These totalitarian regimes were almost all collectivist whereby the government dictated the economy and eventually society in order to achieve goals they believed were just and noble. You can call them socialists, or communists, or fascists, but really, they all operated similarly. Today in America it is “social justice” which is just another word for coercive state control over the individual. But, as Friedrich von Hayek said, their desires outstrip their understanding: history has shown that this path will end in tragedy, not utopia.

What set me off on this critique of contemporary ideology was Professor Nancy MacLean whose book, Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America has been praised in Progressive circles. In it she claims that James Buchanan, a distinguished Nobel prize winner in economics, was at the intellectual forefront of a dark libertarian movement to support segregation and to protect the rights, position, and capital of rich white folks. The National Endowment for the Humanities awarded her $50,400 to write the book.

As an expert on the philosophy and history of the libertarian movement, I can assure you that her premise is absurd. James Buchanan was a fine scholar with a long record of excellent scholarship. Her scholarship on the other hand has been eviscerated by many academics as consisting of lies, innuendo, exaggeration, misquotes, unsubstantiated citations, and taking things out of context. They have challenged her to refute their very specific criticisms, but she doesn’t respond other than to make personal attacks on her critics. The fact that she doesn’t understand economics (her admission) would lead one to question her ability to criticize a Nobel-awarded economist.

Yet her book was praised by Progressive media such as the New York Times, The New Republic, The Atlantic, Oprah Magazine, NPR, and Slate. Many enthusiastic reviewers cited her extensive list of citations as evidence of her scholarship. The point about MacLean, an outspoken Progressive, is that she formed a conclusion and then tried to fit facts to support it. That is not scholarship. One prominent critic called the book “speculative historical fiction.” Her premise is that libertarians wish to impose a draconian regime on America to preserve “capital” and position of the wealthy. Anyone with a smattering of knowledge about libertarianism would know that control over others is a very unlibertarian thing to do. Yet Progressives love her. MacLean is emblematic of the trend in academia where political ends trump scholarship.

Her latest response to critics is to accuse libertarians of being autistic. “It’s striking to me how many of the architects of this [libertarian] cause seem to be on the autism spectrum. You know, people who don’t feel solidarity or empathy with others and who have difficult human relationships sometimes.”

This quote should give you some idea about her shallow scholarship. That she would be lionized by the Left reveals their anti-intellectualism and groupthink mind set, which has been characterized as symptomatic of authoritarian personalities.

Which leads me to my next point about the anti-intellectual response on campuses to critics of various theories that are now the rage in academia (Multiculturalism/Critical Theory (Neo-Marxism)/Postmodernism/Post-structuralism). If you disagree with and dissent from these epistemologically-challenged theories, you will be punished. You will be publicly condemned, threatened, and ostracized. But, while you will be shouted down, you won’t be challenged on the merit of your ideas. There is no debate because they know their ideas won’t stand up to rational analysis and criticism.

Law professor Amy Wax of the University of Pennsylvania was on the receiving end of this because she wrote an op-ed piece supporting bourgeois ideals. The reaction among faculty and students was overwhelming. She was accused of hate speech and being a racist. One of her deans asked her to cease teaching and take a leave of absence. 33 colleagues signed an open letter condemning her. Yet none of them addressed her ideas to explain the error of her ways. As she said: “Hurling such labels doesn’t enlighten, inform, edify or educate. Indeed, it undermines these goals by discouraging or stifling dissent.”

Multiculturalism and Critical Theory are now the driving forces behind rising campus intolerance to dissenting ideas and thus, free speech. Words, meanings, reason, and motives are ignored. Speech is to be used as a weapon to further Progressive political goals and to subvert classical liberal concepts such as tolerance, free speech, individualism, reason, and equality under the law. Dissent from Progressive orthodoxy is now “racist hate speech”, a vestige of (white) privilege, and is an act of violence against protected (“oppressed”) groups. The meanings of words are to be manipulated to serve Progressive political goals. Protected groups, all advocates of social justice, are thus “liberated” from the bonds of tolerance and free speech. Intolerance to the speech of dissenters (often violent) is justified to achieve political goals. Any means to an end.

The result is the rise of intolerance and groupthink in academia, which, of all places is supposed to be a bastion of free speech where ideas can be debated and students can learn to think. But, that is not so. Campus free speech is dying.

This is all calculated. These social justice warriors are using these philosophies to achieve Progressive goals. It’s all about politics and their quest for power. Truth, justice, reason, tolerance, and scholarship be damned.

We need to shine light on these trends. We need to expose them for what they are: a proto-totalitarian vanguard. By rejecting free speech and the rigors of scholarship, they chip away at the ideas and ideals that have delivered the greatest advances in health, wealth, and well-being in human history. History has shown that these movements do not end well.

This article originally appeared at An Independent Mind.

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Watch AERC Live

03/22/2019Mises Institute

Keynote AERC lectures and selected panels can be watched live at mises.org/live

Our online schedule includes (Central Time Zone):

Friday

9:15-10:15 A.M. | The F.A. Hayek Memorial Lecture (Sponsored by Greg and Joy Morin)

Randall Holcombe (Florida State University) | Political Capitalism: How  Economic and Political Power Is Made and Maintained

10:30 A.M. – Noon | Panel on Remembering the Interwar Right

David Gordon (Mises Institute), Brion Mcclanahan (Abbeville Institute), Paul Gottfried (Elizabethtown College)

1:30 – 2:30 P.M | The Henry Hazlitt Memorial Lecture (Sponsored by Hunter Lewis)

Robert Luddy (Captiveaire) Henry Hazlitt’s Long-Term Economic | Thinking: Foundation of Entrepreneurial Excellence 

2:45 – 4:15 P.M. | Panel: 100th Anniversary of Nation, State, and Economy

Thomas Dilorenzo (Loyola University Maryland), Joseph Salerno (Mises Institute, Auburn University, and Pace University), Nikolay Gertchev (Ichec Brussels Management School), Jörg Guido Hülsmann (University of Angers)

4:30 – 5:30 P.M. | The Ludwig Von Mises Memorial Lecture (Sponsored by Yousif Almoayyed) 

Michael Rectenwald (New York University, Retired)  Libertarianism(s) Versus Postmodernism and ‘Social Justice’ Ideology

Saturday

9:00 – 10:00 A.M. | the Lou Church Memorial Lecture (Sponsored by the Lou Church  Foundation)

Daniel Ajamian (San Diego, California) The Cost of Enlightenment

1:00 – 2:30 P.M. | Paper Panel: Socialism

Rafael Acevedo  (Texas Tech University), Yuri Maltsev (Carthage College),  Edward Fuller (Palo Alto, California

2:45 – 3:45 P.M. | the Murray N. Rothbard Memorial Lecture (Sponsored by Don Printz)

David Dürr (University of Zurich) The Inescapability of Law:  and of Mises, Rothbard, and Hoppe

4:00 – 5:30 P.M. | Panel: The Significance of Hans-Hermann Hoppe (Sponsored by Steve and  Cassandra Torello)

David Gordon (Mises Institute),  Mark Thornton (Mises Institute and Auburn University),  N. Stephan Kinsella (Kinsella Law Group, Property and Freedom Society), Thomas Dilorenzo  (Loyola University Maryland),  Jörg Guido Hülsmann (University of Angers),  Joseph Salerno (Mises  Institute, Auburn University, Pace University)

Response: Hans-Hermann Hoppe (Property and Freedom Society,  Mises Institute)

Photos available here.

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Block: How I Profess My Libertarianism to My Students

03/19/2019Walter Block

I am a professor (I teach economics at Loyola University New Orleans). In my view, this means I should profess something. I would be bland and uninteresting to my students if all I did was offer them all sides of every controversial issue in an even-handed way, so that none of them even had a clue as to where I stood on any topic. Of course, I would be derelict in my duty if I only offered my own viewpoint. As John Stuart Mill says in his “On Liberty” (paraphrase) “if you only know your own side of an argument, you don’t even know that, since all views are contrasted with all others.”

I thus feel obligated to acquaint my students with a plethora of viewpoints.

So, what do I profess? Austrian economics and libertarian political economy. I offer to my students all sides of an issue, but within five minutes of my first lecture they can readily discern precisely where I stand.

Read the full article at Real Clear Markets.

Walter Block
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Just Sayin'

A Blockchain Study Finds 0.00% Blockchain Success Rate . The study reported also reported 0 vendor call backs when asked for evidence of implementation.

Though Blockchain has been touted as the answer to everything, a study of 43 solutions advanced in the international development sector has found exactly no evidence of success.

Three practitioners including erstwhile blockchain enthusiast John Burg, a Fellow at the US Agency for International Development (USAID), looked at instances of the distributed crypto ledger being used in a wide range of situations by NGOs, contractors and agencies. But they drew a complete blank.

"We found a proliferation of press releases, white papers, and persuasively written articles," Burg et al wrote on Thursday. "However, we found no documentation or evidence of the results blockchain was purported to have achieved in these claims. We also did not find lessons learned or practical insights, as are available for other technologies in development."

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Noah Smith Wants Harvard to Abandon Its Devotion to "Libertarian" Economic Theory. Really.

03/15/2019Troy Vincent

Let's talk about Econ 101, scientism and modern economics.

At Bloomberg, Noah Smith argues that Greg Mankiw's Principles of Economics textbook is out of date because academic economists are more concerned with empirics and wealth inequality.

Furthermore, Smith pushes the view that economic theory itself is outdated. Not only because academic economists no longer study it or care about it, but supposedly because empirics have proven the laws of economics to be out of touch with reality.

He purports that Mankiw proposes theoretical insights that are skewed against redistribution because of his "libertarian political slant." This just seems to be another way of saying that it avoided most Keynesian mathematics and empiricism and focused on the foundational theory.

Many libertarians derive their views on economics from the Austrians. It's worth noting that Mankiw admittedly never read any Austrian economists in undergrad or grad school and only first read Hayek and added a note on Hayek to the 4th edition of his text in the mid-to-late 2000's. If you're conflating politics with economics, Mankiw is far from an Austrian or Austro-libertarian.

Smith neither addresses Mises' a priori defense of economic theory, or praxeology, nor Hayek's criticism of the scientism of the social sciences.

Smith also doesn't address the obvious: economic incentives explain the rise in empiricism in academia. And the politicization of the economy and growth in government explains why the economics professions have shifted politically left and focused their efforts on income distribution.

Smith states that new empirical methods prove that the assumption that economic actors are perfectly rational is false and uses this insight to disparage economists and libertarians relying on insights derived from the foundations of economics.

Disparaging Mankiw's lessons as skewed by libertarian thought ignores the fundamentals of Austro-libertarian economics. Mises did not rely on a view of perfect rationality to arrive at economic conclusions or to confirm the laws of economics. As Mises stated in Theory and History:

The sciences of human action starts from the fact that man purposefully aims at ends he has chosen. It is precisely this that all brands of positivism, behaviorism, and panphysicalism want either to deny altogether or to pass over in silence.

I will conclude with Mises' address to this very debate:

Economic statements and propositions are not derived from experience. They are, like those of logic and mathematics, a priori. They are not subject to verification and falsification on the ground of experience and facts. They are both logically and temporally antecedent to any comprehension of historical facts. They are a necessary requirement of any intellectual grasp of historical events.

While Mankiw is no Austrian, we should not let Smith dictate the discussion or get away with wrongly conflating various economic and political views given that he's completely ignoring long-standing economic explanations that address his criticism of foundational economic insights.

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Recession Will Turn Debt Into Junk

03/15/2019Doug French

Diane Swonk says the 20,000 payroll number for February was a head fake. She blamed bad weather, the government shutdown, and other gobbledygook to explain away the 160,000 job miss for the year’s shortest month.

According to Michael Snyder, in a piece posted on Zerohedge.com,

The U.S. economy is growing at a 0.3 percent annualized rate in the first quarter , based on data on domestic construction spending in December released on Monday, the Atlanta Federal Reserve’s GDPNow forecast model showed.

Mr. Snyder lists 18 data points on his blog “ The Economic Collapse ” supporting the idea that an economic winter is coming.


#1 Farm loan delinquencies just hit the highest level that we have seen in 9 years .

#2 We just learned that U.S. exports declined by 4 billion dollars during the month of December.

#3 J.C. Penney just announced that they will be closing another 24 stores .

#4 Victoria’s Secret has just announced plans to close 53 stores .

#5 On Thursday, Gap announced that it will be closing 230 stores over the next two years.

#6 Payless ShoeSource has declared bankruptcy and is closing all 2,100 stores .

#7 Tesla is also closing all of their physical sales locations and will now only sell vehicles online.

#8 PepsiCo has started laying off workers and has committed to “millions of dollars in severance pay” .

#9 The Baltic Dry Index has dropped to the lowest level in more than two years .

#10 This is the worst slump for core U.S. factory orders in three years .

#11 We just witnessed the largest decline in the Philly Fed Business Index in more than 7 years .

#12 In January, sales of existing homes fell 8.9 percent from a year earlier. That was the third month in a row that we have seen a decline of at least 8 percent. This is an absolutely catastrophic trend for the real estate industry.

#13 U.S. housing starts were down 11.2 percent in December compared to the previous month.

#14 Compared to a year earlier, home sales in southern California were down 17 percent in January.

#15 In December, home sales in Sacramento County fell a whopping 22.5 percent compared to a year earlier.

#16 Pending home sales in the United States have now fallen on a year over year basis for 13 months in a row .

#17 More than 166 billion dollars in student loan debt is now “seriously delinquent” . That is an all-time record.

#18 More than 7 million Americans are behind on their auto loan payments. That is also a new all-time record, and it is far higher than anything that we witnessed during the last recession.

None of this has kept individuals, companies and governments from ramping up debt levels. Leverage abounds, everywhere. Grant’s Interest rate Observer writes, “companies are tapping credit lines to compensate for shortfalls in cash flow.”

Defining a zombie company as one failing to generate cash flow to cover interest expense for three consecutive years, Grant’s points out that 128 companies in the S&P 1500, fit the description. The percentage of living dead has increased over the past 12 months, ending January 31st, from 12.4 percent of the broad index to 13.6 per cent.

Money manager Jeff Gundlach told Grant Williams on Real Vision ,

the economic data continues to deteriorate. And we're starting to see reversals and unemployment claims now rising on a four week moving average basis. We're starting to see earnings estimates collapsing, margin estimates collapsing, sales dropping. You see housing is negative, Surprise indices-- confidence is deteriorating. None of these things are at the alarm-bell recession, but they're getting fairly close.


Gundlach and Williams spoke about the 800 pound elephant in the room, the U.S. government’s off balance sheet obligations. “123 Trillion, six times GDP. If we wanted to fund our liabilities, the 123 trillion-- over the next 60 years, we'd have to put 10% of our GDP aside, from negative 7 today to plus 10,” Gundlach quipped.

After reflecting on investors buying AAA-rated mortgage-backed bonds back in 2005, believing they were playing it safe, Gundlach said,

Well, we have similar-- maybe not as egregious-- but it's an echo of a rating problem in the bond market right now, in the corporate bond market, where the corporate bond market has exploded in size. It's more than double where it was 10 or 12 years ago, and a lot of it is, I think, overrated. There was a report by Morgan Stanley Research that suggested that fully, fully 45% of parts of the corporate bond market would be rated junk right now, if you use leverage ratios alone. Now, they use more than leverage ratios.


There's other variables that go into rating. But the leverage ratio seems to be really important.

Right now the ratings agencies are buying what debt issuers are selling —a rosy future. But with recession clouds gathering, Gundlach figures,

there's not going to be any working towards a better place. And so all of those bonds potentially could be downgraded into a junk status. And as we all know, when a triple-B-rated corporate bond crosses the line into junk status, the price goes down. It doesn't go up. So you can find people that have poured into corporate bonds-- that includes corporate pension plans-- which thought that they had a clever idea of matching up their liabilities, which are discounted by the single-A long corporate rate, and so let's match them with assets that are corporate bonds, so they move together.

As I wrote a couple weeks ago, when debt turns to junk, ETFs and institutional holders will desperately be looking to sell at any price. “So will they sell?” Gundlach wonders rhetorically. “I think the answer is yes. And so if you have a misrated market, and it goes into a downgrade problem, you get tremendous forced selling. And that's what happened in '08 with the securitized market, and this time, I think it's the corporate bond market's turn.”

MacroMavens Stephanie Pomboy echos Gundlach’s view,

In 2007, the lie was that you could take a cornucopia of crap, package it together, & somehow make it AAA. This time, the lie is that you can take a bunch of bonds that trade by appointment, lump them together in an ETF, & magically make them liquid.

So, with this storm brewing, the Fed’s committee to save the world has started its roadshow.

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How Many Economists Still Get Subjective Value Wrong

03/14/2019Per Bylund

Subjective value is not objective. Sounds obvious, but the distinction is lost on most — scholars and practitioners alike.

People seem to think subjective value is simply a person's 'willingness to pay' a price. Well, it's not. Subjective value cannot be expressed in dollars and cents, because that would simply mean subjective value is an expression in terms of objective market purchasing power.

If value is subjective, however, that purchasing power too is subjectively valued, in terms of what subjective value it can provide (through the actual goods and services the money can purchase). And, in any market-like setting, willingness to give up purchasing power for a good only indicates that the person subjectively values that purchasing power (however it is appreciated by him/her) less than the value expected from the good that can be purchased.

Willingness to pay, expressed in the dollars and cents that in turn can command goods and services, only means the buyer expects to be better off from going through with the exchange. In terms of value theory, there may be no connection between the value of that which is forgone and that which is gained in return, other than them being valued differently (the former higher than the latter). 

Scholars should know better than to confuse these things, but they're obviously quite confused. 

Instead of thinking about the meaning of what they say, they adopt a practical shorthand used to get a dollar amount on a customer's valuation. This makes some sense from a practitioner's perspective, where a customer's willingness to pay for one's good is a rough estimate of what money price could potentially be charged for the good. 

It's not accurate, however, which is why entrepreneurship models suggest that entrepreneurs should make sure to charge a price lower than customer's stated willingness to pay (if it can at all be trusted). 

Also, the actual willingness to pay depends on offering the actual good along with the argument for why it would be valuable for the customer to have/buy it.

In a different time and place, and with different messaging, this 'willingness' changes both with how the good is subjectively appraised and with the other opportunities available to the customer. I might value a hamburger, but I value a hot dog more

Consequently, if there are hot dogs my willingness to pay for hamburgers is practically zero; if there are no hot dogs in sight, my willingness to pay for hamburgers may be significant. See how this works?

One's willingness to pay is not about the [subjective] value of the good itself (that is, the satisfaction experienced, or in any case expected), but is contingent on alternatives available. Practitioners who are careful can gain insights from willingness-to-pay estimations. But it is still a very blunt tool, since what actually matters is the subjective valuation of a good and the subjective valuation of alternative goods (the comparison/tradeoff). 

That scholars equate subjective valuation with objective money prices should be considered severe professional misconduct. For those who are in the business of thinking carefully about things, there is no place for conflating things. 

Or, as in this case, mistaking (interpreting, really) subjective value for being objective. This is inexcusable and should disqualify you from the academy.

Originally published on Twitter @PerBylund

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College Admissions Scandal: More Meddling by the Feds

03/13/2019Peter G. Klein

As with the federal investigation into college basketball recruiting, the college admissions scandal announced yesterday seems to fall into FBI jurisdiction only because of the overly broad mail and wire fraud statutes and federal racketeering laws — which make every tort or contract violation into a federal crime. Put differently, if rich parents bribed Yale or Stanford to take their kids, this is between those schools and their employees who took bribes, the kids and parents who lied on their applications, and possibly the other kids who attended (or were denied admission) around that time. Why is the US taxpayer funding this investigation?

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Bipartisan Attacks on the Second Amendment

03/12/2019Ron Paul

A nationwide system of gun registration could be a step toward national gun confiscation. However, antigun bureaucrats need not go that far to use the expanded background check system to abuse the rights of gun owners. Gun owners could find themselves subject to surveillance and even harassment, such as more intensive screening by the Transportation Security Administration, because they own “too many” firearms.

Republican control of the White House and the Senate does not mean our gun rights are safe. Republicans have a long history of supporting gun control. After the 1999 Columbine shooting, many Republicans, including many who campaigned as being pro-Second Amendment, eagerly cooperated with then-President Bill Clinton on gun control. Some supposedly pro-gun Republicans also tried to pass “compromise” gun control legislation after the Sandy Hook shooting.

Neoconservative Senator Marco Rubio has introduced legislation that uses tax dollars to bribe states to adopt red flag laws. Red flag laws allow government to violate an individual’s Second Amendment rights based on nothing more than a report that the individual could become violent. Red flag laws can allow an individual’s guns to be taken away without due process simply because an estranged spouse, angry neighbor, or disgruntled coworker tells police the individual threatened him or otherwise made him feel unsafe.

President Trump has joined Rubio in wanting the government to, in Trump’s words, “take the guns first, go through due process second.” During his confirmation hearing, President Trump’s new Attorney General William Barr expressed support for red flag laws. California Senator and leading gun control advocate Dianne Feinstein has expressed interest in working with Barr to deprive gun owners of due process. It would not be surprising to see left-wing authoritarians like Feinstein work with right-wing authoritarians like Barr and Rubio on “compromise” legislation containing both a national red flag law and expanded background checks.

My years in Congress taught me that few politicians can be counted on to protect our liberties. Most politicians must be pressured to stand up for freedom by informed and involved pro-liberty citizens That is why those of us who understand the benefits of liberty must remain vigilant against any attempt to erode respect for our rights, especially the right to defend ourselves against private crime and public tyranny.

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Jeff Deist Joins TV Azteca to Discuss Free Markets and Liberty

03/12/2019Jeff Deist

During a recent trip to Mexico City, Jeff Deist was able to join Sergio Sarmiento of TV Azteca's adn40 for a great discussion on the meaning of liberty and the power of markets.

The interview is available here.

The Mises  Institute  been excited to increase our reach in the Spanish speaking world in recent years thanks to trips like this, as well our growing library of Spanish-language translations available at Mises.org/es.

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Notes on Fed Chair Jerome Powell's 60 Minutes Non-Interview

03/12/2019Jeff Deist

Jerome Powell, Chairman of the Federal Reserve Board of Governors, appeared on the TV magazine 60 Minutes last night. If you're craving empty calories, watch it here. The whole interview was an exercise in banal pleasantries, not to mention deadly dull. It's what we've come to expect from Fed Chairs, nothing to see here, move along...

But financial twitter, including our friend Danielle DiMartino Booth, was not impressed:

Screenshot 2019-03-12 at 9.25.34 AM.png

Granted, this was 60 Minutes and not Bloomberg or the Wall Street Journal. It was a puffball interview. But is it too much to ask the man who holds tremendous sway over our financial well-being to give the American people a substantive primetime interview? Go back and listen to presidential debates thirty years ago, or old Firing Line shows. We weren't always subjected to dumbed down cartoon versions of policy issues. If Americans can't—or won't—understand the basics of central banking, we really do have bigger problems than unaccountable technocrats at the central bank.

A few notes:

First, it's apparent Mr. Powell has developed his own brand of non-speak. For all his talk of a more transparent Fed, he's still a lawyer who uses language carefully to the point of obfuscation. He's not as opaque and wordy as Alan Greenspan, who could issue forth for several minutes without saying anything comprehensible. He's not as stiff or suspicious as the always-guarded Ben Bernanke. No, Powell sounds more like Chance the Gardener in Being There: monotone assurances that "growth will be healthy," the U.S. economy is "in a good place," and the Fed must be "patient" when assessing interest rates. 

Second, reporters do a uniquely bad job covering the Fed. We don't know much about Scott Pelley at 60 Minutes, but his idea of a tough question was whether Trump had the power to fire a Fed Chair (he finally got Powell to squeak "No" after a bit of dissembling about legal consensus). Where were the questions about quantitative easing, the most radical monetary policy in human history? How about the Fed's enormous balance sheet, and whether in fact it will be unwound? Can money and credit simply be created without harm to the economy? Can the U.S. federal government continue to service its debt if interest rates rise into the historically average 5-10% range? Is inflation really as low as Chairman Powell claims, or do grocery shoppers know better? How about the moral hazards involved with reinflating equity and housing markets? Or why not just a homespun question about how elderly savers are expected to manage when money market and CD rates are below 3%? 

These are all simple, essential questions which would help Americans gain a sense of Mr. Powell's confidence in the big picture. 60 Minutes could have enjoyed a rare scoop, bringing the vital but critically under-examined topic of monetary policy to a big audience. But instead we got to hear Powell's views on the opioid crisis and immigration, and his soft murmurs about muted inflation. What a wasted opportunity.  

Finally, we've heard versions of the "cautiously optimistic" mantra so many times it begins to sound like a sedative. Alan Greenspan said it in the late 90's and then stocks blew up. Ben Bernanke saw nothing particularly untoward in U.S. housing markets in 2007. Janet Yellen believes we won't have another financial crisis "in our lifetimes" (she's in her 70s...). And now Jay Powell "sees no reason" the economy can't keep chugging along (even though he recently backpedaled on rate hikes and aggressively tapering the Fed's swollen balance sheet). And of course that's true until it isn't.

The lesson here is plain for all who will see it: booms and busts are engineered and created by central banks, not by some mysterious manifestations of markets themselves. They can be traced back to expansionary monetary policies in the past. in 2019 we're going on ten years of boom, one of the longest in American history. If things go south, as they did in 2008, the Fed has far fewer tools at its disposal—and the world has far more debt. As Professor Per Bylund reminds us, central bankers ought to spend more time learning what causes bubbles instead of scrambling to figure out what burst them after the fact.

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